YouTube Pivoting Away from Independent Creators

The people to get where you are going, are not the same as the ones that got you to where you are.

-Business Owner

With everything happening with YouTube right now I think a lot about the above quote. A friend of mine who runs a successful business is the one who said it. We were having a conversation bout the difficulty of leaving people behind as you grow more successful. The fact that the person that helped you get you first store off the ground is not going to be able to help you scale to 50. Feelings get hurt, and you have to just keep moving.

From my perspective as a YouTube creator I do not believe that YouTube wants the business that they have created over the past 10 years. I could speculate as to the reasons, but the actions say a lot. Even after 10 years YouTube does not talk with creators very well. Rules seem to change on a whim and creators are left to muddle it out. Revenue is still treated like a beta product even when tens of thousands of creators have come to rely on it. Features and functionality that creators need to be able to better serve their audience rarely come about. YouTube focuses on other things.

YouTube focuses on re-skinning the site. YouTube TV is launched to offer a live TV option. They heavily promote “social activism” type content. They bend over backwards to placate advertisers to a degree that just seems odd. (How did cracking down on ISIS videos end up demonetizing Casey Neistat’s video trying to raise money for the Las Vegas shooting victims?)

From what I can see YouTube has decided that their game is in competing with Netflix and Hulu, and I honestly believe that old school creators are being gently shown to the door. I came to realize at the beginning of the year that I don’t believe that YouTube’s current model has the chance to be a viable business. Regardless of how much the price for storage and bandwidth drop the cost for an open video platform is enormous. Since this is a free service usage and revenue do not necessarily correspond to each other. Look at Netflix increasing their fee by $1 per month, and then realize that YouTube has no way to do the same. Conversely the more popular YouTube gets, the more money it may lose…

This is why The Hollywood Reporters latest story on YouTube struck me hard, “YouTube Grows Up: Inside the Plan to Take on Netflix and Hulu”. When you read it there is a lot of talk about paying big money for original content, and attracting “real” media stars to the platform. They discuss that it is felt that “old” media type content is better for advertisers, and that is where the push is.

With a veteran television exec, talent like Demi Lovato and Google’s $86 billion in cash, the platform known for skateboarding videos and tween vloggers wants to join the battle to become a prestige TV player. “I want our shows to resonate in a big way with audiences,” says content head Susanne Daniels. “And once that happens, we’ll be on that list — like it or not.”

Days before Morgan Spurlock debuted his anticipated Super Size Me sequel at the Toronto Film Festival, the documentary already was drawing buyer interest. Netflix made a play for Spurlock’s poultry industry exposé, per sources. Hulu and CNN also were said to be in the mix, but a surprising distributor quickly rose to the top: YouTube. The lights had just dimmed on Super Size Me 2: Holy Chicken‘s Sept. 8 world premiere when THR reported that the streamer would pay $3.5 million for the documentary, committing to a theatrical release and a hefty marketing spend.

YouTube CEO Susan Wojcicki laid out her multipronged offensive: a slate of ad-supported unscripted originals from such names as Demi Lovato (see sidebar), Ryan Seacrest and Ellen DeGeneres, coupled with a scripted push for YouTube Red that combines existing IP (including Step Up: High Water, an offshoot of the dance movie franchise, and The Karate Kid spinoff Cobra Kai) with projects fronted by its homegrown digital stars.

…YouTube is willing to spend like any cable outlet (around $2 million an episode for dramas), say people familiar with its deals…

There is a second and darker angle to the quote about leaving people behind that I started with. When you’re dealing with a business, or any large organization, you many times do not have the luxury of honesty. You may need to layoff a department in a month, but until that time you need the employees of the department doing their jobs. If you make you intentions known as a business leader employees have a tendency to spend all the time they have left sending out resumes, and not actually doing the work you’re still paying them for. When you pivot a business you can’t just turn on a dime. The money you’re making from the current products is what’s paying for the transition. The shadiest reason of all for lack of transparency is that if the pivot fails you can just pivot back to what you were doing, and most employees won’t know that they were within a week of a pink slip.

When I look at what YouTube is doing it has all the hallmarks of a large organization making a major pivot, and keeping key people in the dark. If it works they make a ton of money, and if it fails they say everyone is just paranoid and, “of course nothing is changing. We were just doing some corporate house cleaning and a manager got over enthused.”

I don’t know why YouTube wants to pivot into “premium TV” offerings. They have billions of views from people trying to escape the mainstream media. The content that creators publish costs YouTube nothing more than storage and bandwidth. When Versus Valerie spent $20,000 per webisode and then only got 10K views that cost didn’t hit YouTube’s bottom line. Instead of tweaking the system that they have they are doing what so many companies are doing now and trying to compete in an ever harder space.

It can’t be exaggerated how full the “premium video” space is getting. Hulu and Netflix are the big names, but CBS, HBO, Fox, Disney, and a slew of others are in varying stages of pushing their own platforms. Even Apple is trying to get into the game, which no one I know can even explain much less defend.

So YouTube has built a platform focused on Independent creators, but in all public moves is distancing themselves from these folks. I would argue that they should be looking at focusing what they have, and better utilizing the resources that have already been created. If they communicated better with creators much of the “ad friendly” issues could be resolved. Please understand the idiocy of the current system.. If you are vulgar, and push the limits, the recommendation algorithm will boost traffic to your videos, and you’ll make more money. As you replicate what you did to become successful you’ll gather a real and valuable following. At about this point the demonetization bot will determine your work does not fit guidelines, and your revenue will be cut by 90%. So to be clear. Creators copy and replicate styles that YouTube promotes, and then YouTube punishes those creators for creating that type of content…

With better communication most creators would be willing to adjust their content. With some type of guarantee of revenue creators will be more willing to invest and spend real money to create more polished content. With a better notification system, and improved way to sort content viewers will watch more of what has already been created. And with some ability to create a real business partnership with YouTube creators will stop feeling like dime store hookers to be disposed of after they have done their service.

These are small changes that can implemented rather easily. In all the time I’ve been a creator on YouTube I’ve seen them increase the resolution all the way to 4K 60fps. Allow for 4K live streaming. They have launched 360 degree VR type video, and have made a ton of infrastructure improvements to the site. What I have seen near ZERO improvement in is with the relationship to content creators. I have gone from it being that if a video gets flagged having to deal with an automated system, to now I have someone to call. That’s about it… To be clear my Partner Manager is a great person, and I’m sure a fine employee, but functionally she has almost no power.

If they cared about creators they could make changes, and be vocal about making changes. Instead we hear about YouTube TV, and The Rock giving advice of channel building. It seems clear that the higher level decision makers have already decided where YouTube is going. I just wish they would have the ability to let the people who depend on the revenue from the platform know what’s going on.

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1 Comment

Hi Eli,
I have been watching your videos on YouTube and have learnt a lot, you are probably the best IT teacher I found on YouTube. Keep rocking, may God bless you with more success and happiness.
Regards
Chetan